TMI Blog2019 (5) TMI 1114X X X X Extracts X X X X X X X X Extracts X X X X ..... e net profit rate of 5% on works contract subject to depreciation and 3% rate on supply by CIT-A he has followed the finding of his predecessor in the case of the assessee for assessment year 2012-13. Assessee has not brought on record any order of the Tribunal, where this net profit rate applied by the CIT(A) in assessment year 2012-13 has been disturbed. In absence of any contrary order of the higher appellate forum, the order of the CIT(A) for assessment year 2012-13 has become final. No infirmity in the order of the CIT(A) for the year under consideration in following the own comparison of profit results of the assessee upheld by the learned CIT(A) for estimating the net profit from works contract as well as from supply contract. - Decided against assessee. - ITA No.1742/Del/2018 - - - Dated:- 15-2-2019 - Shri Bhavnesh Saini, Judicial Member And Shri O.P. Kant, Accountant Member For the Appellant : Shri J.B. Sharma, CA For the Respondent : Shri N.K. Bansal, Sr.DR ORDER PER O.P. KANT, A.M.: This appeal by the assessee is directed against order dated 28/02/2018 passed by the Ld. Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view the intention of law assessees s income needs to be confined only upto the level of TDS deduction in the interest of justice. 5. That assessee is involved in civil construction business at Greater Noida which is known for its competitive environment. Keeping in view of such non avoidable facts and circumstances the action of CIT(Appeals)-XX in estimating income in tune of Ld. ACIT subjects to certain relief as provided hereinabove is on higher side which needs your interference to break such benchmark. 6. It is highly harassing and unlawful to arbitrary estimate the income without considering facts, circumstances and changes in volume of assessee s business in the year under review wherein the turnover has considerably increased from ₹ 2,30,98,823.00 (in the immediate preceding year) to ₹ 33,05,93,841.00, the Gross Profit from 3.97% (in the immediate preceding year) to 4.08% and the Net Profit from 1.12% (in the immediate preceding year) to 1.50%. This fact of substance has been completely ignored by the Ld. ACIT, Circle 62(1) New Delhi. 7. To substantiate we would like to draw your kind attention to certain judic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... progress, non-maintenance of stock register and other deficiencies pointed out in the assessment order and determined the income at the rate of the 8% on the gross receipt from contract business of ₹ 33,05,93,841/-, which was worked out to ₹ 2,64,47,507/- and 3% of the supply receipt of ₹ 28,54,900/-, which was worked out to ₹ 85,647/-. In this manner, the Assessing Officer after reducing the profit shown of ₹ 50,27,221/- by the assessee in return of income, made net addition of ₹ 2,15,05,933/-. On further appeal, the Ld. CIT(A) upheld the rejection of books of accounts, however, reduced the rate of net profit from contract work from 8% adopted by the Assessing Officer to 5% and further allowed depreciation. In case of receipt from supply, he confirmed the net profit rate of 3%. In this manner, he reduced the total addition from ₹ 2,15,05,933/- to ₹ 92,78,280/-. Aggrieved with the addition sustained by the Ld. CIT(A), the assessee is in appeal before the Tribunal. 3. Ld. counsel of the assessee filed written submission along with copy of submissions made before the lower authorities. The Ld. counsel submitted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d case the Tribunal confined the net profit at the rate of 3.25% of the receipt. The Ld. counsel also referred to decision dated 22/05/2015 of the Hon ble High Court of Delhi in the case of CIT- 21 Vs Rajender Singh, wherein the Hon ble High Court upheld the decision of the Tribunal confirming the net profit rate of 1.94% estimated by the Ld. CIT(A). 6. On the contrary, the Ld. DR relied on the order of the Ld. CIT(A) and submitted that in view of the defects noticed by the Assessing Officer, the Ld. CIT(A) is justified in upholding the rejection of books of accounts. On the issue of net profit rate applied by the Ld. CIT(A), he submitted that the Ld. CIT(A) has followed finding of his predecessor in assessment year 2012-13, which the assessee has not challenged further, thus the assessee himself has accepted the net profit rate of 5% on the works contract subject to depreciation and net profit rate of the 3% on supply contract. Accordingly, he submitted that the order of the Ld. CIT(A) might be sustained. 7. We have heard the rival submission and perused the relevant material on record. As far as rejection of books of accounts by the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... books of accounts. Accordingly, we uphold the action of the Assessing Officer in invoking section 145(3) of the Act and rejection of books of accounts of the assessee. 9. As far as sustaining the net profit rate of 5% on works contract subject to depreciation and 3% rate on supply, by the Ld. CIT(A) is concerned, we find that the Ld. CIT(A) has followed the finding of his predecessor in the case of the assessee for assessment year 2012-13. In the impugned order, the Ld. CIT(A) has reproduced finding of his predecessor in assessment year 2012-13. In view of the finding of his predecessor, the Ld. CIT(A) estimated the profit in the year under consideration as under : 4.3.5 As the facts and circumstances of the case is almost similar, respectfully following the observation of CIT(A) in A.Y. 2012-13, the rejection of books of accounts of the appellant is upheld as the Assessing Officer has given justified reasons for the same. Further, the appellant could not produce any supporting evidence and approved rates and the reasons of fall in the approved rates during the course of appellate proceedings also. Reliance is placed on the decision of Hon&# ..... X X X X Extracts X X X X X X X X Extracts X X X X
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